Question

Bottles R Us Bottling Company provides the following information about its single product. Targeted operating income ​$654,870 Selling price per unit ​$7.50 Variable cost per unit ​$4.60 Total fixed cost ​$163,560 How many units must be sold to earn the targeted operating​ income?

Answer 1

282,217 units

Step-by-step explanation:

Given: Selling price per unit =
`\$ 7.5`

Variable cost per unit =
`\$ 4.6`

Total fixed cost =
`\$ 163,560`

Targeted operating income =
`\$ 654,870`

Taking x as number of unit sold to achieve targeted operating income.

Formula for net operating income =
`\textrm (selling price per unit - variable cost per unit) * no. of units sold - total fixed cost`

Now, putting values in the formula

⇒ 654,870 =
`(7.50 - 4.60) * x - 163560`

⇒ 654,870 =
`2.9x - 163560`

Now, we Add both side with 163560

⇒ 818430 =
`2.9x`

Next, we divide both side by 2.9

∴
`x = 282217.24` ≅ 282217

282217 number of units must be sold to achieve the targeted operating income.